2019 has come and gone, leaving behind memories that might never be erased. In the Nigerian equity market, the year was not a very good one for many investors. As Nairametrics reported, the NSE All-Share Index ended the year with a 14.6% loss.

Related findings by Nairametrics Research also disclosed that the end of 2019 marked the worst performance by the Nigerian stock market in the last three decades.

Jim Ovia, Chairman of Zenith Bank Plc

While we sympathise with all the regular retail investors who might still be counting their losses, our focus is mainly on billionaire investors in the capital market. Note that these billionaires are majority shareholders in some of the biggest companies listed on the Nigerian Stock Exchange. How did their portfolios fare in the course of 2019?

Comparisons and calculations

To answer this question, we did some comparisons and calculations. The paper values of these billionaires’ shareholdings in various companies were compared by multiplying their shareholdings by the stock price of their companies on a year-on-year basis.

For the sake of clarity, let us first list out the names of the companies where the billionaires have shareholdings, along with their comparable share prices on a year-on-year basis.

United Bank for Africa Plc: The share price stood at N7.85 at the end of 2018, compared to N7 in December 2019.

Zenith Bank Plc: This tier-one bank ended 2018 with a share price of N23. However, by the end of 2019, the share price had fallen to N18.40.

Access Bank Plc: Surprisingly, the Access Bank stock was a top performer in 2019, closing the year with share a price of N9.95 as against N6.80 during the comparable period in 2018.

Seplat Petroleum Development Company Plc: This oil and gas major closed 2018 with a share price of N592.50. As of 2019 year-end, the company’s share price stood at N549.70.

Conoil Plc: Similarly, Conoil’s share price at the end of 2019 dropped to N18.50 compared to N23.25 which was recorded at the end of 2018.

Dangote Cement Plc: Share price as at December ending, 2018 was N183, compared to share price of N140 in December 2019.

Cement Company of Northern Nigeria Plc: Share price at the end of 2018 was N19.95. This is more than the N18.10 with which the company share price ended 2019.

Dangote Sugar Refinery Plc: N15.25 in December 2018 compared to N13.80 in December 2019.

Nascon Allied Industries Plc: The company’s share price at the end of 2018 was N18. By the end of 2019, it had dropped to N12.90.

MRS Oil Nigeria Plc: At the end of 2018, the company’s share price was N25.70. Fast-forward to December 27th, 2019, it had dropped to N15.30.

May & Baker Nigeria Plc ended 2018 with a share price of N2.45. As at December 27th, 2019, it was N1.93.

Focus on the billionaires and their portfolios

We shall now focus on how the changes in these companies’ share prices influenced the valuation of the shares held by the billionaires listed below.

Tony Elumelu

Tony Elumelu is a billionaire businessman and philanthropist who is most notable for being the Chairman of United Bank for Africa Plc. According to information obtained from the company’s recent audited financial report, Elumelu owns a total of 189,851,584 units of direct shares in UBA. He also owns a total of N2,045,354,576 units of indirect shareholding in the company. This brings his total shareholding to 2,235,206,160 units of shares.

When we multiplied by UBA’s share price of N7.85 as at December 2018, we found that the paper value of Elumelu’s shareholding in the company stood at N17.5 billion. However, when we multiplied the same units of shares by UBA’s 2019 year-end share price of N7, we got N15.6 billion.

What this means is that the value of Tony Elumelu’s shareholding declined by as much as N1.9 billion in 2019.

Jim Ovia

Information available in Zenith Bank’s audited financial report states that Mr Ovia (who currently serves as the company’s Chairman) holds a total of 5,059,336,405 units of direct and indirect shareholding. This makes him the biggest shareholder in the company, and one of Nigeria’s top billionaires.

Multiplying Jim Ovia’s total shareholding by N23 gave us N116.4 billion. A similar multiplication using the company’s 2019 year-end share price gave us N93 billion.

This means that the value of Jim Ovia’s shareholding in Zenith Bank reduced by N23.4 billion in 2019.

Jim Ovia, Chairman of Zenith Bank Plc

Herbert Wigwe

The total units of shareholding belonging to Access Bank’s Group CEO, Herbert Wigwe, stands at 1,441,522,910. This is according to information obtained from the company’s financial report. When multiplied by N6.80, this gave us N9.8 billion. We also multiplied the same units of shares by N9.95 and got N14.3 billion.

What this means is that the value of Wigwe’s shareholding increased by some N4.5 billion.

Abdulsamad Rabiu

Globally acclaimed businessman, Alhaji Abdulsamad Rabiu, is the Non-Executive Chairman of the Cement Company of Northern Nigeria Plc (CCNN). The billionaire owns a total of 12,752,801,231 shares in the company. At a share price of N19.95 which the company recorded at the end of 2018, the value of Alhaji Rabiu’s shareholding in the company stood at N254.4 billion.

However, that amount had dropped by December 2019, due to the decline in the company’s share price. As noted above, CCNN’s share price stood at N18.10 as at December 27th last year. When we multiplied Alhaji Rabiu’s 12,752,801,231 units of shares by N18.10, we got N230.8 billion.

This means that the billionaire lost a whopping N23.6 billion last year.

Austin Avuru

Seplat’s outgoing Chief Executive Officer, Austin Avuru, owns a total of 70,823,139 units of shares in the oil and gas company. When multiplied by N592.50 with which the company ended in 2018, the monetary value of Mr Avuru’s shareholding was N41.9 billion. By the end of 2019, his share value had reduced to N38.9 billion, meaning that he lost about N3 billion last year.

Austin Avuru

Mike Adenuga

Mike Adenuga is the Chairman of Conoil Nigeria Plc and he has personal shareholdings in the company to the tune of 103,259,720 units of shares. He also has some 516,298,603 units of indirect shares through Conpetro Limited in Conoil Plc which owns 74.40% of Conoil’s issued share capital.

In total, Mike Adenuga owns 619,558,323 units of shares. This multiplied by Conoil’s share price of N23.25 at the end of 2018, amounted to N14.4 billion.

As at December 27th, 2019, the company’s share price was N18.50, meaning that the value of Mr Adenuga’s shareholding in the company dropped to N11.5 billion. In all, the billionaire lost N2.9 billion in 2019.

Mike Adenuga

T.Y Danjuma

Retired Lieutenant General Danjuma, who currently serves as the Chairman of drug-manufacturing company, May & Baker Nigeria Plc, owns some 43.28% of the company’s entire issued share capital. The shareholding, all indirectly held by the billionaire, can be broken down thus:

T.Y Holdings Ltd: 720, 878, 543

Oil Tech Nigeria Ltd: 14, 874, 759

Osis Yuvic Ltd: 11, 088, 000

These numbers sum up to 746, 841, 302 units of shares. We multiplied this by the N2.45 share price with which the company ended 2018 and got N1.8 billion. We also multiplied Danjuma’s total units of shares by the N1.93 share price with which the company ended in 2019 and got N1.4 billion. From the foregoing, Lieutenant Danjuma lost some N388 million last year.

Aliko Dangote

Alhaji Aliko Dangote owns 85% majority shareholding in Dangote Cement Plc through Dangote Industries Limited. The total units of shares he owns in the company amount to 14,484,431,294 shares. Multiplied by the company’s share price of N184 at the end of 2018, we have N2.7 trillion. When also multiplied by the company’s share price of N140 at the end of 2019, Dangote’s share value stood at N2.0 trillion. Subtract N2.0 trillion from N2.7 trillion, then we have N700 billion, representing how much value the billionaire lost in the course of last year.

Dangote International Limited also owns about 68% of Dangote Sugar Refinery Plc’s issued shares. This amounts to some 8.16 billion units of shares. Multiplied by N15.25 with which the company’s share price ended 2018, we got N124.4 billion. The same units of shares multiplied by N13.80 with which the company’s share price ended 2019, gave us N112.6 billion.

It should be noted that Aliko Dangote also directly holds some 635,095,014 units of shares which translated to N9.7 billion when multiplied by N15.25. The same units of shares multiplied by N13.80 million translated to N8.8 billion.

Collectively, the share value of Dangote’s collective holding in Dangote Sugar Plc back in 2018 was N134.1 billion. As of December ending 2019, that value had dropped to N121.4 billion, thereby indicating that the value reduced as much as N12.7 billion.

Aliko Dangote indirectly has a 62.19% stake in NASCON Allied Industries Plc through Dangote Industries Limited, amounting to 1,647,763,557 units of shares. In the same vein, Aliko Dangote holds a direct stake of 635,095, 014 shares valued at N13.6 billion, bringing his total shareholding in the company to 2,282,858,571.

Dangote’s total units of shares in NASCON Allied, multiplied by the company’s share price of N18 in December 2018, gave us N41 billion. When we multiplied the same amount of shares by a share price of N12.90 with which the company ended last year, we got N29.4 billion. N41 billion minus N29.4 billion equaled N11.6 billion.

From the foregoing, it can be seen that the paper value of Aliko Dangote’s entire shareholdings in Dangote Cement, Dangote Sugar, and NASCON Allied collectively reduced by a whopping 724.3 billion.

Note that we did not calculate the value of Alhaji’s shareholding in his flour business because of the recent acquisition of Dangote Flour Mills Plc by Olam.

NOTICE: A big thank you to all the readers who called our attention to some of the mathematical errors in this piece. The errors have now been rectified and the corrections effected.

Related

Emmanuel holds an MSc. in International Relations and a B.A in Philosophy & Logic, both from the University of Ibadan. He is a communications professional.
As a Lead Business Analyst at Nairametrics, he focuses mostly on quoted companies, their products/services, and the economy in which they operate.
Emmanuel is also experienced in the areas of corporate communication, brand communication, corporate storytelling, public relations, business research, management/strategy, etc.
You may contact him via his email- emmanuel.abara@nairametrics.com.

The news of the lockdown hit raw nerves across all sectors in Nigeria. One thing that was obvious from the onset was that everyone was going to be hit somehow, but what no one could say for sure, was how.

Nairametrics had earlier examined the first 12 weeks of COVID-19 in Nigeria, and found that Nigeria’s billionaires lost billions between February and April. However, the gradual easing of the lockdown which started on May 1, appears to have brought some relief to these men, giving them room to recover some of the earlier losses.

Aliko DangoteDangote Cement shares were worth N130 at the end of April, having had a rough first quarter. However, the price improved over the next four weeks and ended May 29 at N139 per unit.

Aliko Dangote directly owns 14,500,315,501 shares in Dangote Cement Plc, as well as 27,642,637 shares which he controls through Dangote Industries Limited.

All 14,527,958,138 shares were worth N1.88 trillion (N1,888,634,557,940) on April 30, and the value increased to N2 trillion (N2,019,386,181,182) by May 29, an increase of N130 billion (N130,751,623,242).

A similar trend is also seen in Dangote Sugar where share price increased from N12.45 on April 30 to N12.90 at the close of trading on May 29.

Tony Elumelu
The popular TOE, as he is called, controls a total of 2,304,211,118 units of shares – 190,100,234 direct and 2,114,110,884 indirect shares.

UBA’s shares tried to regain losses from earlier months, and moved from N6.05 on April 30 to N6.65 on May 29.

The total worth of Elumelu’s 2.3 billion shares appreciated from N13,940,477,263 on April 30 to N15,323,003,934 on May 29, giving the billionaire an additional N1.38 billion (N1,382,526,670.8).

Compared to the N1.49 billion lost in the preceding 12 weeks, Elumelu clearly recovered most of the earlier losses.

Abdulsamad Rabiu
The merger of CCNN and Obu cement gave birth to BUA cement. The 2019 financials from the company shows that Rabiu owns 19 billion (19,044,995,225) direct shares.

He also has indirect shareholdings through 3 companies, totalling to 12.2 billion (12,225,657,346) units.

BUA cement stocks ended April 30 at N32.60 and appreciated by 28% to N42 per unit at the close of trading on May 29.

By April 30, Rabiu’s 31.27 billion shares (direct and indirect) were worth N1.01 trillion (N1,019,423,273,814.60) at N32.6 per unit, and by the end of trading on May 29, the market value of the same shares had risen to N1.31 trillion (N 1,313,367,407,982.00).

The billionaire’s worth added N293.94 billion (N 293,944,134,167.40) representing a 28% gain, and making him the highest billionaire gainer in the period under review.

Mike Adenuga
As Chairman of Conoil Nigeria Plc, Mike Adenuga directly controls 516,298,603 units of shares, as well as 103,259,720 units of shares controlled through Conpetro Limited, making for about 74.4% of Conoil’s issued share capital.

Conoil’s stock prices closed at N17.4 on April 30, putting the value of Adenuga’s indirect shares at N1.79 billion (N1,796,719,128), and his direct shares at N8.9 billion (N8,983,595,692.2), totalling to N10.78 billion.

Conoil gained 20.7% in May, and ended at N21 per unit share at the end of trading on May 29.

Want to be like Warren Buffet, Michael Phelps? Here are their secrets

Michael Phelps won 22 Olympic medals (18 gold), how did he do it? Well, he trained and trained and trained, then he ate and ate and ate every day. He was also blessed with natural attributes i.e., he was tall.

So, wait, if I am tall and eat, and train, I can also win 18 gold medals? No! but stay with me.

Warren Buffet likes to invest. He reads research reports, likes numbers and is always looking a discount deal on great stocks. Ok. So, if I am good with numbers, research buy great stocks I will become as rich as Warren Buffet? Well, maybe not as rich but you will earn more from your investments. The distinctiveness among Phelps, Bolt, Buffet, Musk, Dangote, and Ovia, is not what they do, but how they do it and how often they do it.

Let’s look at an Olympic swimmer like Michael Phelps. When Michael was eight, he wrote out his goals; he wrote, “I would like to make the Olympics,” then listed his time goals for the various races i.e. breaststroke, freestyle etc. At the age of eight, this future Olympian had visualized his goals, written them down, and put a date for accomplishing them.

When seeking to create a financial plan, it is impossible to achieve success without visualizing out a goal on paper. Imagine creating an investment plan without any idea of a retirement date or income or rates of return. It’s impossible without a clear road map to determine how much to save and invest for five years. During his teenage years, he trained “every single day, 365 days a year, Sundays, Christmas and Thanksgiving days included… and twice on his birthdays,” says his coach, Bob Bowman.

If an investor saved N1.00 every day for 5 years at 0%, that saver would have N1,826.00 What if those savings increased to N5.00 and were invested at just 5% annually? Then the savings pot will become N10,373.04. Yes, inflation will erode the value after 5 years, but applying a 13% inflation rate, the saver still has a real saving of N5,170.14.

So, the second lesson we take from Olympic champions is to start early, save, and then invest constantly. Micheal Phelps is a swimmer, a sport for endurance and speed. What do endurance athletes like swimmers and marathon runners eat? Food rich in carbohydrates; they need the carbs to fuel the massive amount of energy they expend during their sports. Phelps, for instance, for breakfast eats as many as 12,000 calories prior to his races. His breakfast consists of “three fried-egg sandwiches, three chocolate chip pancakes, a five-egg omelette, three sugar-coated slices of French toast, and a bowl of grits.”

What does a sprinter like Bolt eat? Not calories but lean protein, eggs, meat, fish, dairy. Protein allows muscles to recover and develop after sprinting, which causes minute damages to muscle fibres that can be easily converted to energy. So, two different Olympic champions, each multiple gold medal winners, but because of their different sports, they eat very differently to achieve a different objective.

Similarly, in investing, each investor is different, bond investors have instruments that have 30-year durations as opposed to stock traders who may be looking to buy and flip a stock in hours. What is key is to invest according to a stated objective and risk profile.

Where the investor has a longer endurance factor to risk, meaning the investor can accommodate volatility in his earning, that investor will be comfortable investing on equities. Equities are higher-risk investments and can lose all invested capital but can also gain 100%.

However, where the investor has a lower risk endurance, then the investor will fill his plate with lean risk asset classes like sovereign bonds which offer lower volatility to stock and deliver a fixed return, but suffer if interest rates rise.

Thus, our third lesson from the Olympians, the food each investor eats, is a function of his individual sport. Where the investors have lower risk, his asset allocation diet is different. Each investor must tailor his asset allocation to his objectives and investment goals.

Nigerian billionaires lose billions amid COVID-19 pandemic

The year 2020 began with lots of predictions and promises, but the volatility in the stock market (which was occasioned by the Coronavirus pandemic) was not top on the list.

On February 27, Nigeria recorded the index case of the Coronavirus pandemic, an Italian who visited the country for business reasons. A month later, the federal government was preparing to announce a lockdown of the economy as part of measures to curb the seemingly unpredictable increase in the spread of the Coronavirus.

The lockdown which commenced 2 days after the announcement brought a lot of uncertainty into the financial markets, and this definitely comes with huge consequences for individual and corporate investors.

For many investors around the world, the first four months of the year was a bad one. There were fluctuations and sudden declines in stock prices. And for top Nigerian billionaires, it was definitely more of the losses than the gains. This article examines how they performed in the last two months, from February 29 after the index case was Q1 2020.

Alhaji Aliko Dangote

Being the richest man in Nigeria is no mean feat, yet Dangote has been able to maintain this title for years without breaking a sweat. However, the Coronavirus pandemic has taken a bite out of the billionaire’s billions.

By the end of February 2020, Dangote’s 14,500,315,501 direct shares in Dangote Cement Plc worth N2,465,053,635,170 at the share price of N170 per unit, while the 27,642,637 shares which he controls through Dangote Industries Limited were worth N4,699,248,290 at the same share price.

By implication, the total worth of his shareholding in Dangote Cement Plc as at February 29, 2020, was N 2,469,752,883,460‬—over N2.4 trillion.

The value slid downwards hitting N129.70 at the end of March, before rising slightly to N130 at April 30.

At this time, Dangote’s indirect shares were worth N3,593,542,810 while his direct shares were worth N1,885,041,015,130 summing up to N1,888,634,557,940 (over N1.8 trillion).

By comparing N 2,469,752,883,460‬, the value as at February 29, with N1,888,634,557,940 as at April 30, we can see that the billionaire’s assets in Dangote Cement Plc crashed by N 581,118,325,520 (N581 billion).

By any standards, this was no small loss.

Stock prices at Dangote sugar also suffered a similar fate. Starting at N14.00 per unit on January 1, the stock experienced fluctuations before closing the quarter at N10.00 per unit. Dangote’s 8,775,541,295 direct and indirect shares were valued to be worth N122,857,578,130.00 (N122.85 billion) at a share price of N14.00 on January 1.

Twelve weeks later, with the stock price down to N10.00 per unit, the worth of the same shares had dropped to N87,755,412,950.00 (N87.75 billion), a heartbreaking loss of N35,102,165,180.00 (N35.1 billion).

Stock prices at Dangote sugar, however, took a different trend for this period, starting at N12.1 on February 29 and appreciating almost 3% to 12.45 at the end of April.

The billionaire directly owns 653,095,014 shares and indirectly owns 8,122,446,281 shares through the Dangote Industries Limited. Dangote’s 8.77billion shares were valued to be worth N106,184,049,669.5 (N106.84 billion) at a share price of N12.1 on February 29.

Twelve weeks later, with the stock price up to N12.45 per unit, the worth of the same shares had increased to N109,255,489,122.75. This gain of about N3 billion was recorded during the pandemic period, and on surface value, it can be attributed to the food products which the company produces. People eat even during a crisis.

Adding up the figures with that of Dangote cement, one can see that the little gain of N3 billion cannot be compared to the loss of N581 billion, as the mogul still lost over half a trillion.

We have not made any calculations for NASCON, as there is no way to confirm the stocks Aliko Dangote has with the company since he is not listed on the board.

However, NASCON shares closed at N13 on February 29, and slid down to N10.05 on April 30, dropping by 23%.

Tony Elumelu

Entrepreneur billionaire and Chairman of United Bank for Africa Plc, Tony Elumelu also had some losses during the two months in review.

TOE, as he is called, directly owns a total of 190,100,234 units of shares in the bank, and 2,114,110,884 units of indirect shareholding in the company. This brings his total shareholding to 2,304,211,118 units of shares. By the close of trading on February 29, UBA’s shares were worth N6.7, meaning Elumelu’s total stocks in the bank was worth N15,438,214,490.6 (N15.43 billion).

There was not much movement in the share values for UBA plc as it started N6.7 on February 29 and ended April at N6.05. This means that by April 30, Elumelu shares (multiplied by the share price of N6.05 per unit) were worth N13,940,477,263.9 (N13.94 billion), showing a loss of N1,497,737,226.7 (N1.49 billion). This loss was a 9.7% depreciation of his share value, but N1.49 billion was no small loss for TOE.

Jim Ovia

The founder of Zenith Bank, Jim Ovia is one of Nigeria’s top billionaires. He directly owns 3,546,199,395 units and indirectly owns 1,513,137,010 units of shares. With over 5 billion units of direct and indirect shareholding in the bank, he is the biggest shareholder. Zenith Bank’s shares closed at N18.5 on February 29, danced a little way up and a little way down, before sliding continuously to close at N14.3 as at April 30.

As at February ending, Ovia’s total 5,059,336,405 units of shares were worth N93.59 billion (N93,597,723,492 at the share price of N18.5 per unit. By April 30, following the crash in prices, the worth of the same shares had dropped to N72,348,510,591.5 (N72.35 billion). Subtracting the latter value from the first, one can see that the worth of Jim Ovia’s stocks dropped by a whopping N21.2 billion (N21,249,212,901).

Among all the billionaires, Jim Ovia suffered the greatest percentage loss in the worth of his assets, 22.7%.

Herbert Wigwe

Access Bank’s Group CEO, Herbert Wigwe had a total shareholding of 1,441,522,910 units as at December 2019, before selling off a total of 55,611,001 indirect shares in four transactions, all in January 2020.

The depletion of his indirect holding through Trust and Capital Limited left him with 1,385,902,910 total shares made up of 1,184,680,195.5 units indirect holding and 201 million (201,231,713) direct shares. ‬

Share prices of Access bank closed at N8,2 on February 29 and dropped to N6.6 on April 30. His 1.39 billion shares were worth N 11,364,477,653.80 on February 29, and crashed by 19% to become N 9,147,018,599.40 on April 30.

Wigwe is N2.22 billion poorer because of the COVID-19 induced stock crisis.

Alhaji Abdulsamad Rabiu

According to the Cement Company of Northern Nigeria Plc (CCNN) 2018 financials, Abdulsamad Rabiu had 12,752,801,231 units of shares. However, CCNN has since then been merged with the Obu Cement to give birth to BUA Cement. Since the merger, the new entity BUA cement has not released any financial statement so there was no way to confirm what Rabiu’s stakes are in the company presently.

However, BUA cement had its stock close at N37.15 at the end of February 29, 2020. This value dropped by 12.25% over the weeks to hit N32.6 by 30 April.

By implication, whatever the number of shares the billionaire had with the company, the value has dropped by over 12% in the COVID-19 dominated weeks.

Note that the stocks started the year at N18.10, meaning that the billionaire has lost even much more than we have captured.

Mike Adenuga

Mike Adenuga is the Chairman of Conoil Nigeria Plc, and directly owns 516,298,603 units of shares. He also has 103,259,720 units of indirect shares through Conpetro Limited, making for about 74.4% of Conoil’s issued share capital.

Conoil’s stock prices started at N18 per unit and only dropped a little to close at N17.4 on April 30.

Multiplying Adenuga’s 103,259,720 indirect shares by the stock price of N18 gives us a naira value of N1.86 billion (N 1,858,674,960) as at February ending, but the slight decline in stock value reduced the worth of these shares to N1.79 billion (N1,796,719,128).

Adenuga lost N61.9 million (N61,955,832) in his indirect shares to the COVID-19 crisis.

The 516,298,603 direct shares fell from N9.29 billion (N9,293,374,854) to N8.9 billion (N8,983,595,692.2) by end of April—a difference of N309 million.

From these figures, we can see that Adenuga’s had a loss of N371 million (N371,734,993) within the period under review.

Table of losses

Billionaire

Losses (N’billions)

Aliko Dangote

581.0

Tony Elumelu

1.5

Jim Ovia

21.2

Herbert Wigwe

2.2

Austin Avuru

6.5

Mike Adenuga

0.3

Understanding the trend

A lot of factors affect the stability or otherwise of a company’s stock price and one of them is the volume of shares being traded.

A Council member, Nigerian Stock Exchange, Adebayo Ajayi, explained that the more shares owned by an individual investor, the fewer number of shares being traded and the more stable the price can be.

Investors often rush to sell when they sense uncertainty in the market. This results in a larger volume of shares being traded and directly impacts share values.

According to Ajayi, the stocks in Dangote group of companies, for instance, float more as the billionaire has gradually let in more investors over the years.

Note: The stock figures used in the analysis above was sourced from the Nigerian Stock Exchange (NSE) website, using the most recent figures from the companies’ financials.